Perspectives · Benefits Management
This post emphasizes why the delivery of sustainable change initiatives requires the ability to adopt sustainable business cases, how to approach business cases organizationally, and the tools and techniques for writing them. This is part of a series to help raise awareness around sustainable change delivery.
When you can measure what you are speaking about, and express it in numbers, you know something about it;
But when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind;
It may be the beginning of knowledge, but you have scarcely in your thoughts advanced to the state of science.
Lord Kelvin (1824– 1907), British physicist and member of the House of Lords
Over the past few decades, I have come to the realization that sustainable business cases are one of the key instruments for empowering sound, risk tolerable, sustainable and beneficial change. Regrettably, they are also a key success factor frequently ignored or poorly invested in. If investing in sustainable business case models is not a priority, then you and your organization are probably limited to the two options highlighted in the title graphic above... Do you feel rich (are you going to spend your way to success) or do you feel lucky (hope for the best)? This dilemma ties into the frequently quoted, but empirically unproven, statistic that roughly 70% of change initiatives fail… but how do we know if they succeeded or failed? What are the criteria against which projects are evaluated? The simplest and most comparable vehicle for their evaluation is the sound and useable business case. In assessing success or failure one can ask: Did the initiative have value (worth), based on the costs, benefits and risks associated with it over its lifecycle, and was it strategically relevant? Hindsight is all very well, but how then is one to know, in advance, whether a change initiative is likely to succeed or fail? In attempting to answer this question, I like to ask executives the following questions, specifically around their business cases:The Green Book provides guidance for central government produced by the Treasury on how publicly funded bodies should prepare and analyse proposed policies, programmes and projects to obtain the best public value and manage risks. It also covers the evaluation of policies programmes and projects after they have been implemented to find out how well they have achieved their original objectives and how well they have delivered within their original budgets and planned timescales. The Green Book guidance on assessing public value and risks applies to proposals and decisions about both spending public money and to changes in regulation.The contents page of the Green Book is presented below showing the range of information covered:
Perspectives · Sponsorship
“No such thing as failed projects, only failed governance.”
Exhibit 1 provides some of the commonly-referenced lists for causes of project failures, all of which reference sponsorship near the top. One of the key success factors for change initiatives is successful sustainable sponsors. Unfortunately, though, sustainable sponsors have not received the same attention and investment as project, programme and portfolio management standards and training. The recognition of the importance and priority of sponsorship is highlighted in the table above in bold purple. Some innovative leaders have dealt with this opportunity, but they represent the exception rather than the rule. Two initiatives comprise the UK Government’s Major Projects Authority and the GAPPS new Project Sponsor Standard. The GPM Global Sustainable Sponsor Program was designed to facilitate understanding of sponsorship and organizational sustainable change delivery. My bias on this topic is based on either participating in change delivery initiatives as the project / programme manager, reviewing projects or programmes as portfolio manager, or assessing countless change delivery engagements where the sponsor either had no idea what they were expected to do or what they had signed up for.The Major Projects Authority Annual Report 2014-15 demonstrates significant transparency and leadership in Federal Government Portfolio management with regard to change delivery.
Exhibit 2 provides a summary of the size, context and nature of the MPA Portfolio:
Exhibit 3 illustrates the development of a culture of openness about the challenges facing major projects. "The MPA uses the data from the GMPP to focus our efforts on the projects that are facing the most significant challenges, supporting projects to address and resolve these challenges" through the delivery confidence assessment (DCA). "The DCA provides a summary of a project’s status, and is reported as a traffic light system ranging from green for the projects judged as being the most likely to succeed, to red for those projects facing the most serious challenges."
Exhibit 3 demonstrates the ongoing improvement in the UK Major Projects Authority delivery confidence assessment ranking over time, reducing the number of high risk red initiatives from 7 to 2, and improving the green initiatives from 7 to 19. The UK MPA recognized the importance of identifying, communicating and dealing with challenged initiatives head on, as opposed to watermelon reporting... green on the outside and red on the inside.
The Government Major Projects Portfolio data from September 2014 provides the following type of project meta data that continues to exemplify federal government portfolio transparency:
The UK Cabinet Office’s MPA collaborated with Oxford University’s Saïd Business School and Deloitte to establish the Major Projects Leadership Academy (MPLA). Their remit is to ensure that senior public servants “responsible for major projects are able to cope with the particular stresses and strains of leading a big project in the public sector; and it encourages agility against a backdrop of unfolding change in priorities, circumstances and political direction” (University of Oxford Saïd Business School, 2015). Specifically, the MPA established the MPLA to accomplish what some may consider the following audacious goals within government to (University of Oxford Saïd Business School, 2013)…
Transforming the implementation of Government policy through world-class delivery of major projects by:
Exhibit 6 highlights the four key competency domains that the Major Projects Leadership Academy (MPLA) focuses on:
Perspectives · Portfolio Management
The identified measures are:
Perspectives · Benefits Management
"Put first things first … Begin with the end in mind." — Stephen Covey
Imagine that you are the project manager for the iPhone. One of your engineers suggests a new technology for a 40-hour battery that is equal or less expensive to produce than the current battery. Before the new version can be produced, three months and $30 million more must be spent. As the project would be out of scope, more expensive and would delay the release, what would you do? There is a debate around whether project managers should focus on benefits at all. There are arguments that the output focus of some project management approaches follow production theory, whereas a focus on benefits is based on a strategic alignment and takes on a more sustainable asset lifecycle perspective. I tend to lean towards the latter… This discussion is changing, however, as the new draft of the PMI PMBOK includes benefits, which hopefully this post will provide support to. A similar discussion is taking place about the difference between PM success and project success. With PM success, the project may have been managed flawlessly, as based on the best appropriate practices, and delivered on time within the budget and scope. However, if the output is shelved, never to be used and left to gather dust, the organization realizes no benefits from the investment; this is PM success, not project success. Take the instance of a heart surgeon and a heart replacement "project." The patient (sponsor) is advised of the risks, benefits, costs and value by the surgeon. The surgery takes place on time, on budget and the patient wakes up alive and leaves the hospital healthy. However, there is a complication a few days after leaving the hospital and dies. Some would argue the project management was a success... the project wasn't. An example, courtesy of Prosci, is provided below:"Have you just built a beautiful ship,
or
have you done what is needed to get people on board?" (PROSCI, 2010)
Though Exhibit 1 is a little overly simplistic, it does help to demonstrate the purpose of this post: Project success is about realizing the benefits identified in the business case.Bradley, G. (2010). Fundamentals of Benefits Realisation. The Stationery Office.
Jenner, S. & APMG-International (2014). Managing Benefits: Optimizing the Return from Investments, 2nd Edition. The Stationery Office.
OGC - The Office of Government Commerce. (2006). Business Benefits through Programme and Project Management. The Stationery Office.
The upside to the organization with project management is to incorporate benefits management to realize the significant improvements. Though the following graphic was initially intended for sustainability reporting, it also highlights potential improvements in focusing on benefits.
Perspectives · Benefits Management
Over the years, I have noticed conflicting perspectives on "strategy", particularly between the East and the West:“… the real conflict is not between profit maximization and social responsibility…
but rather between short- and long-term thinking.“
Exhibit 1: Eleven Second Excerpt from the Disney Film Up
"Initiatives usually fill the value gap by enabling new capabilities - or promoting changes - through the outputs delivered by a set of projects" (Serra et al, p. 55, 2014).Exhibit 8 provides another perspective also helps highlight the numerous areas where the project manager and project team can aid in the optimal realization of benefits from the project. A key part of Exhibit 8 is the demonstration of the impact of intermediate benefits, dis-benefits and other benefits that can be enhanced to improve the project. All of these empower greater benefits realization, which is more sustainable. Consider the Boiling Frog anecdote… I remember the story of an executive working with a Fortune 100 company in the early 2000s developing strategy. Early on, the corporation was focused on analysing their strategic horizon over decades. Then things started to get tight, and strategy became a ten-year horizon. Then a five-year horizon. Then a three-year horizon (you see where this is going). By the time strategy hit one-ish year(s), the executive left the company. It was like the boiling frog… the corporation knew better but became desensitised to the madness.
"If you plunge a frog into boiling water, it will immediately jump out. But if you place the frog into cool water and slowly heat it to boiling, the frog won’t notice and will slowly cook to death. So claims the myth. Indeed, everyone—from corporate consultants to politicians to environmental activists—cites the frog fable as proof that people often don’t see change happening and cannot deal with it in the aftermath.
So how did this myth begin? Maybe it arose because frogs are cold-blooded. We humans are warm-blooded: our internal thermometers measure the local temperature, and then we shiver or sweat to maintain a body temperature of around 37 degrees Celsius. But a cold-blooded frog maintains the temperature of its immediate environment. Perhaps somebody once wrongly thought that this meant frogs had an inferior or inadequate thermometer.
Or perhaps the story began with E.W. Scripture, who wrote The New Psychology in 1897. He cited earlier German research: “. . . a live frog can actually be boiled without a movement if the water is heated slowly enough; in one experiment, the temperature was raised at the rate of 0.002 per second, and the frog was found dead at the end of 2.5 hours without having moved."
Perspectives · Project Management
The UN Post-2015 Business Engagement Architecture outlines platforms for action and partnership which can help optimize and scale up corporate sustainability efforts as well as contribute to corporate participation in the broader multi-stakeholder efforts to achieve UN goals. These supporting elements include various forums and platforms that enable companies and other stakeholders to work together – by geography, sector and/or issue. Such initiatives are key to facilitating the type of partnerships and collective action without which systemic challenges cannot be overcome. (UNGC,2013)
As a key supporter of the UN Global Compact and advocate for adoption of the ten principles in project, program, and portfolio management, we believe strongly in collaboration. On September 30th, we had the opportunity to work with SumarSe, the UN Global compact local network for Panama, on PSM3, our organizational sustainability assessment model.
The SumarSe team led by Teresa Moll de Alba along with myself, our VP of Strategy Peter Milsom (CA), new VP of Research Michael Young (AU), CIS Regional Director Oxana Klimenko (RU) and Latin America Deputy Director Blas Ramos (PA) discussed the climate for sustainability and CSR in Panama and the positive local impact that the collaboration between our two organizations will could and will have.
After successfully working through the PSM3 Pre-Assessment, we are now working on ways to grow the model together and support sustainable development (and change delivery) in Panama.
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